High inflation and meagre wage rises will leave many Britons without any increase in living standards for more than a decade, a leading thinktank has said.

Presenting its analysis of Tuesday's autumn statement, the Institute for Fiscal Studies (IFS) predicted real median household incomes would be no higher in 2015-16 than they were in 2002-3. In other words, more than a decade will have passed without any increase in living standards for those on average incomes.

"We estimate that in the period 2009-10 to 2012-13 real median household incomes will drop by a whopping 7.4% – another record matched only by the falls seen between 1974 and 1977," said IFS director, Paul Johnson.

The IFS analysis showed that the unemployed and pensioners dependent on state benefits would do better than working families.

"Failure to index some elements of tax credits, and the reversal of previous decisions to increase child tax credits in real terms, will leave some poorer families worse off and will lead to an increase in measured child poverty," said Johnson.

The IFS based its estimates for the squeeze on incomes on forecasts from the independent Office for Budget Responsibility. The OBR published its own outlook for the economy alongside Osborne's statement. It forecast that average real earnings will fall by nearly 3% in 2011 and fall again in 2012.

On the back of forecasts for contraction at the end of this year and barely any growth next year, Osborne was forced to concede the UK risked falling into recession.

The resulting strain on the public finances meant the chancellor had to pencil in two more years of substantial spending cuts.

"That will extend to six years the period for which total spending will have been cut year-on-year. One begins to run out of superlatives for describing quite how unprecedented that is," said Johnson.

"Certainly there has been no period like it on the UK in the last 60 years."